CLINTON'S HEALTH PLAN

CLINTON'S HEALTH PLAN; Health Care Spending Is Found to Vary Greatly State by State

By ROBERT PEAR,

Published: October 7, 1993

WASHINGTON, Oct. 6—
The Federal Government issued new data today showing huge variations in health care spending from state to state. The figures suggest that the Government would have difficulty setting local budgets for health spending, as President Clinton has proposed.

An explicit goal of Mr. Clinton's health plan is to reduce variations in the level of medical spending and its growth.

The new data, from the Department of Health and Human Services, show that Mr. Clinton's proposal to revamp the nation's health care system will affect different states in very different ways, a fact already complicating the politics of health care legislation.

William S. Custer, research director of the Employee Benefit Research Institute, a private organization, said, "The difference in per capita health costs among states, and even between parts of the same state, like Houston and Austin, Tex., is much greater than the difference in per capita costs between the United States, on the one hand, and Canada or Britain, on the other."

In publishing the department's data today, Health Affairs, a quarterly journal of health policy, asked, "Should a diverse country of continental proportions alter spending patterns that have evolved without any strong central guiding force, but rather through laissez-faire policies?" Portrait of Variety

It has been more than a decade since the Government published state-by-state estimates of health spending, primarily because Federal officials perceived little need for such data.

Summarizing the new data, Katharine R. Levit, chief of the Government's office of national health accounts, said, "Per capita spending for hospital and physician services and for prescription drugs ranged from a high of $2,112 in New England to a low of $1,567 in the Rocky Mountain region in 1991 -- a difference of 35 percent."

For the United States as a whole, spending on these health care items totaled $1,877 per person in 1991, the Government reported. Besides New England, the only region in which per capita spending exceeded the national average was the Middle Atlantic region of Delaware, Maryland, New Jersey, New York, Pennsylvania and the District of Columbia. Per capita spending for this region was $2,105 in 1991.

Ms. Levit said that personal income appeared to be the most important factor influencing the level of health care spending in a state. In addition, the study said, high levels of health care spending may reflect the presence of large numbers of doctors, a large proportion of medical specialists and a high concentration of elderly people.

But some disparities have no simple or obvious explanation. Earlier studies have found large geographical variations in medical practice and prevailing medical wisdom. The frequency of hysterectomies, coronary bypass operations and other surgery varies widely, even in population groups of similar age and income.

In its report today, the Government made these points:

*Two states, New York and California, accounted for one-fifth of spending on hospital care, doctors' services and prescription drugs in 1991. Spending in California, $58.1 billion, was 51 percent higher than in New York, where it totaled $38.5 billion. New York and California account for about a fifth of the nation's population, with California being about 68 percent larger than New York.

*From 1980 to 1991, spending grew faster in New Hampshire than in any other state. Growth was slowest in Illinois. Personal income and population grew rapidly in New Hampshire, but population growth was slow in Illinois. Among regions, the Southeast had the highest growth, while the Great Lakes region had the slowest.

*People with high incomes tend to spend more on health care than people with low incomes. On the average, people in New England spent more for such care than people in the Rocky Mountain states, but spending as a share of personal income was about the same, 9 percent, in the two regions.

*In the Middle Atlantic region, per capita spending for hospital care was 19 percent higher than the national average. But it was 17 percent lower than the national average in the Rocky Mountain states. The Middle Atlantic region ranked first in the nation in hospital admissions per person and in the average length of hospital stays.

*After the Rocky Mountain region, the Southwest had the lowest per capita spending on health care in 1991. These regions had only 13 percent of the United States population. Per capita spending grew at about the same pace in these regions as in the nation generally. But use of hospitals and doctors was lower than the national average. Close Look at 2 States

The report looked closely at two states, Hawaii and Maryland. "Hawaii has led the nation in health care reform by providing almost universal health insurance coverage for its population since the early 1970's," the study said. But spending per person on health care rose slightly faster in Hawaii at 9.8 percent a year than in the nation as a whole, which was 9.4 percent.

Near-universal coverage in Hawaii may have encouraged people to use extra health care services, the study said. Nationwide, the use of hospitals (measured by inpatient days per capita) declined 26 percent from 1980 to 1991, but it rose 3.6 percent in Hawaii.

In Maryland, which regulates hospital rates, per capita spending for hospital care grew more slowly than the national average. But spending for doctors' services grew faster.

Data in the report came from many sources, including the Census Bureau, the Internal Revenue Service, the Bureau of Labor Statistics and the American Hospital Association.

The numbers do not necessarily show the amounts spent by state residents, some of whom may get care in places other than the states where they reside. A Maryland resident, for example, may have surgery performed at a hospital in the District of Columbia. The money for such an operation is attributed to Washington. But Federal officials are working on estimates that will show spending by people who cross state borders to obtain health care.

The data in the report, for doctors, hospitals and drugs, account for 70 percent of spending on personal health care. The cost of nursing homes, home health care, dentists, psychologists and certain types of medical equipment is not included.

Chart: "Paying for Health Care: A National P:anorama" lists the amounts spent for each person on hispital care, doctors' services and prescription drugs in each state in 1991. (Sources: Department of Health and Human Services, Census estimates)